Major changes to home health PPS proposed for 2019

Payment rates under the home health prospective payment system (HH PPS) will increase by 1 percent for calendar year (CY) 2018. In a Proposed rule CMS would implement case-mix methodology refinements and amendments to the Home Health Value-Based Purchasing (HHVBP) model. The rule also outlines a payment system redesign in 2019, which will involve 30-day episodes of care (Proposed rule, 82 FR 35270, July 28, 2017).

Payment rate provisions. Despite the 1 percent increase under the HH PPS, required by section 411(c) of the Medicare Access and CHIP Reauthorization Act (MACRA) for HHAs that submit required quality data, payments to home health agencies (HHAs) would be reduced by 0.4 percent in CY 2018 under the rule, saving about $80 million. The $190 million increase from the payment rate update would be offset by a negative 0.97 percent adjustment to the standardized 60-day episode payment rate. This negative adjustment is comprised of minus 0.9 percent of nominal case-mix growth and the removal of the rural add-on provision. HHAs that do not submit quality data for the Home Health Quality Reporting Program (HHQRP) will be subject to a 2 percentage point market basket percentage decrease.

CMS is statutorily required to target up to but no more than 2.5 percent of total payments as outlier payments. Using preliminary CY 2016 claims data and the proposed CY 2018 payment rates, outlier payments are estimated to make up about 2.47 percent of total HH PPS payments under current methodology. Due to this projection, CMS is not proposing changes to the fixed-dollar loss (FDL) ratio for CY 2018, and will leave the FDL ratio at 0.55 with a loss-sharing ratio of 0.80. The agency found that the current loss-sharing ratio will allow this PPS to remain consistent with high-cost outliers in other Medicare payment systems. CMS noted that there may be a change to the FDL ratio in the upcoming Final rule due to updating the estimates of outlier payments using more current HH PPS data.

Changes for 2019. For periods of care beginning on or after January 1, 2019, the rule proposes a change in the unit of payment, switching from 60-day episodes of care to 30-day episodes. These case-mix methodology refinements are referred to as the home health groupings model (HHGM), and rely on patient information and clinical characteristics to place these shorter episodes of care into payment categories, which CMS believes would improve payment accuracy and access for medically complex cases.

These updates stem from findings issued in a previous report required by section 3131(d) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) that suggested HHAs could be better incentivized to serve patients who do not need therapy services but require skilled nursing care for clinical complex and/or poorly controlled clinical conditions. Under these changes, therapy service use thresholds would be eliminated in order to remove an incentive to provide more therapy visits, a recommendation submitted in the Medicare Payment Advisory Commission’s (MedPAC) March 2017 report to Congress (see MedPAC makes 2018 payment recommendations, March 16, 2017). In addition, an admission source category would be added and six clinical groups would be created. The Low-Utilization Payment Adjustment (LUPA) threshold, used for episodes with four or fewer visits, would be revised in order to be more consistent with 30-day episodes of care. HHGM implementation will require provider education and training, manual revision, and claims processing system changes.

Quality reporting. In order to comply with the Improving Medicare Post-Acute Care Transformation Act (IMPACT Act) (P.L. 113-185), which requires post-acute care providers to report standardized patient assessment data and other measures, three new measures are proposed for the HHQRP:

changes in skin integrity post-acute care: pressure ulcer/injury;

application of percent of residents experiencing one or more falls with major injury; and

application of percent of long-term care hospital patients with an admission and discharge functional assessment and a care plan that addresses function.

In determining which measures to add to the HHQRP, CMS reviews measures implemented in other programs and measures endorsed by the National Quality Forum (HQF) for other provider settings. CMS is reviewing reports generated by various agencies on the possibility of adjusting for social risk factors, and is weighing the importance of improving beneficiary outcomes and reducing health disparities while ensuring that provider quality of care of fairly assessed.

HHVBP. HHAs participating in the HHVBP model would have to submit a minimum of 40 completed Home Health Care Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) surveys to receive a performance score for any measures. CMS believes that this policy will better align the HHVBP model with the patient survey star ratings system used for Home Health Compare. The Outcome and Assessment Information Set (OASIS)-based measure, drug education on all medications provided to patient/caregiver during all episodes of care would be removed from the measure set. The proposed rule discusses some measures considered for possible inclusion in future rulemaking.

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